[Congressional Record Volume 143, Number 155 (Friday, November 7, 1997)]
[House]
[Pages H10204-H10210]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  ENSURING THAT COMMERCIAL ACTIVITIES OF PEOPLE'S LIBERATION ARMY OF 
                          CHINA ARE MONITORED

  Mrs. FOWLER. Madam Speaker, as the designee of the chairman of the 
Committee on International Relations, pursuant to House Resolution 302, 
I call up the bill (H.R. 2647) to ensure that commercial activities of 
the People's Liberation Army of China or any Communist Chinese military 
company in the United States are monitored and are subject to the 
authorities under the International Emergency Economic Powers Act.
  The Clerk read the title of the bill.
  The text of H.R. 2647 is as follows:

[[Page H10205]]

                               H.R. 2647

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. CONGRESSIONAL FINDINGS.

       The Congress makes the following findings:
       (1) The People's Liberation Army is the principal 
     instrument of repression within the People's Republic of 
     China, responsible for occupying Tibet since 1950, massacring 
     hundreds of students and demonstrators for democracy in 
     Tiananmen Square on June 4, 1989, and running the Laogai 
     (``reform through labor'') slave labor camps.
       (2) The People's Liberation Army is engaged in a massive 
     military buildup, which has involved a doubling since 1992 of 
     announced official figures for military spending by the 
     People's Republic of China.
       (3) The People's Liberation Army is engaging in a major 
     ballistic missile modernization program which could undermine 
     peace and stability in East Asia, including 2 new 
     intercontinental missile programs, 1 submarine-launched 
     missile program, a new class of compact but long-range cruise 
     missiles, and an upgrading of medium-and short-range 
     ballistic missiles.
       (4) The People's Liberation Army is working to coproduce 
     the SU-27 fighter with Russia, and is in the process of 
     purchasing several substantial weapons systems from Russia, 
     including the 633 model of the Kilo-class submarine and the 
     SS-N-22 Sunburn missile system specifically designed to 
     incapacitate United States aircraft carriers and Aegis 
     cruisers.
       (5) The People's Liberation Army has carried out acts of 
     aggression in the South China Sea, including the February 
     1995 seizure of the Mischief Reef in the Spratley Islands, 
     which is claimed by the Philippines.
       (6) On July 1995 and in March 1996, the People's Liberation 
     Army conducted missile tests to intimidate Taiwan when Taiwan 
     held historic free elections, and those tests effectively 
     blockaded Taiwan's 2 principal ports of Keelung and 
     Kaohsiung.
       (7) The People's Liberation Army has contributed to the 
     proliferation of technologies relevant to the refinement of 
     weapons-grade nuclear material, including transferring ring 
     magnets to Pakistan.
       (8) The People's Liberation Army and associated defense 
     companies have provided ballistic missile components, cruise 
     missiles, and chemical weapons ingredients to Iran, a country 
     that the executive branch has repeatedly reported to Congress 
     is the greatest sponsor of terrorism in the world.
       (9) In May 1996, United States authorities caught the 
     People's Liberation Army enterprise Poly Technologies and the 
     civilian defense industrial company Norinco attempting to 
     smuggle 2,000 AK-47s into Oakland, California, and offering 
     to sell urban gangs shoulder-held missile launchers capable 
     of ``taking out a 747'' ( which the affidavit of the United 
     States Customs Service of May 21, 1996, indicated that the 
     representative of Poly Technologies and Norinco claimed), and 
     Communist Chinese authorities punished only 4 low-level arms 
     merchants by sentencing them on May 17, 1997, to brief prison 
     terms.
       (10) The People's Liberation Army contributes to the 
     People's Republic of China's failure to meet the standards 
     the 1995 Memorandum of Understanding with the United States 
     on intellectual property rights by running factories which 
     pirate videos, compact discs, and computer software that are 
     products of the United States.
       (11) The People's Liberation Army contributes to the 
     People's Republic of China's failing to meet the standards of 
     the February 1997 Memorandum of Understanding with the United 
     States on textiles by operating enterprises engaged in the 
     transshipment of textile products to the United States 
     through third countries.
       (12) The estimated $2 billion to $3 billion in annual 
     earnings of People's Liberation Army enterprises subsidize 
     the expansion and activities of the People's Liberation Army 
     described in this subsection.
       (13) The commercial activities of the People's Liberation 
     Army are frequently conducted on noncommercial terms, or for 
     noncommercial purposes such as military or foreign policy 
     considerations.

     SEC. 2. APPLICATION OF AUTHORITIES UNDER THE INTERNATIONAL 
                   EMERGENCY ECONOMIC POWERS ACT TO CHINESE 
                   MILITARY COMPANIES.

       (a) Determination of Communist Chinese Military 
     Companies.--
       (1) In general.--Subject to paragraphs (2) and (3), not 
     later than 90 days after the date of the enactment of this 
     Act, the Secretary of Defense, in consultation with the 
     Attorney General, the Director of Central Intelligence, and 
     the Director of the Federal Bureau of Investigation, shall 
     compile a list of persons who are Communist Chinese military 
     companies and who are operating directly or indirectly the 
     United States or any of its territories and possessions, and 
     shall publish the list of such persons in the Federal 
     Register. On an ongoing basis, the Secretary of Defense, in 
     consultation with the Attorney General, the Director of 
     Central Intelligence, and the Director of the Federal Bureau 
     of Investigation, shall make additions or deletions to the 
     list based on the latest information available.
       (2) Communist chinese military company.--For purposes of 
     making the determination required by paragraph (1), the term 
     ``Communist Chinese military company''--
       (A) means a person that is--
       (i) engaged in providing commercial services, 
     manufacturing, producing, or exporting, and
       (ii) owned or controlled by the People's Liberation Army, 
     and
       (B) includes, but is not limited to, any person identified 
     in the United States Defense Intelligence Agency publication 
     numbered VP-1920-271-90, dated September 1990, or PC-1921-57-
     95, dated October 1995, and any update of such reports for 
     the purposes of this Act.
       (b) Presidential Authority.--
       (1) Authority.--The President may exercise the authorities 
     set forth in section 203(a) of the International Emergency 
     Economic Powers Act (50 U.S.C. 1702(a)) with respect to any 
     commercial activity in the United States by a Communist 
     Chinese military company (except with respect to authorities 
     relating to importation), without regard to section 202 of 
     that Act.
       (2) Penalties.--The penalties set forth in section 206 of 
     the International Emergency Economic Powers Act (50 U.S.C. 
     1705) shall apply to violations of any license, order, or 
     regulation issued under paragraph (1).

     SEC. 3. DEFINITION.

       For purposes of this Act, the term ``People's Liberation 
     Army'' means the land, naval, and air military services, the 
     police, and the intelligence services of the Communist 
     Government of the People's Republic of China, and any member 
     of any such service or of such police.

  The SPEAKER pro tempore. Pursuant to House Resolution 302, the 
gentlewoman from Florida [Mrs. Fowler] and the gentleman from Indiana 
[Mr. Hamilton] each will control 30 minutes.
  The Chair recognizes the gentlewoman from Florida [Mrs. Fowler].


                             General Leave

  Mrs. FOWLER. Madam Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on this measure.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Florida?
  There was no objection.
  Mrs. FOWLER. Madam Speaker, I yield myself such time as I may 
consume.
  (Mrs. FOWLER asked and was given permission to revise and extend her 
remarks.)
  Mrs. FOWLER. Madam Speaker, today the House is considering H.R. 2647, 
legislation I have introduced to call attention to U.S. commercial 
activities of the People's Liberation Army, better known as the PLA, of 
China and give the President expanded authority to take action against 
PLA-owned enterprises doing business in the United States.
  It has been well-documented that China's military-owned enterprises 
have been directly involved in the international proliferation of 
nuclear and chemical weapons technologies and of missiles and missile 
technologies. Recent revelations include information about the sale of 
ring magnets and specialized high temperature industrial furnaces, used 
in constructing nuclear weapons, to Pakistan; technical support for 
Iran's nuclear program; and missile technology sales to Iran, Syria, 
and Pakistan. The profits from these sales are piled back into the 
modernization of the PLA and fund such aggressive activities as the 
missile tests conducted off Taiwan in advance of the 1996 elections 
there and the PLA's seizure of contested islands in the South China 
Sea.
  What many Americans do not know is that the Chinese military also 
operates many enterprises that deal in nonmilitary commodities, and 
that they profit handsomely from their activities in the United States. 
A report released earlier this year indicated that vast quantities of 
goods as varied as rattan products, toys, ski gloves, garlic, iron 
weight sets, men's pants, car radiators, glassware, pollock fillets, 
swimsuits, and much more are being sold to U.S. consumers by PLA-owned 
firms.
  This chart that I have here will give Members an example. All those 
that are in the peach color are companies that have been documented by 
our Defense Intelligence Agency as being directly owned by the People's 
Liberation Army. Those in the peach color are the ones that would be 
affected by this legislation. The ones to the other side, in the other 
color, are their defense industrial base. Some of them have indirect 
connections also, but any Members who are interested today might want 
to come up and look at this chart. They would be amazed at the 
companies listed here.

[[Page H10206]]

  H.R. 2647 would do two things. First, it would require the Secretary 
of Defense, in consultation with the Attorney General, the Director of 
Central Intelligence, and the Director of the FBI, to maintain a 
current list of Chinese military firms operating directly or indirectly 
in the United States. This list, consisting strictly of PLA-owned 
companies, would be updated regularly in the Federal register.
  Second, it would give the President enhanced authority under the 
International Emergency Economic Powers Act, better known as IEEPA, to 
take action against Chinese military-owned firms if circumstances 
warrant, including freezing their assets or otherwise regulating these 
firms' activities.
  Thus, if a PLA-owned firm is found to be shipping missile guidance 
components to a rogue state like Iran, the President would have the 
authority to take immediate action against a United States subsidiary 
of that firm which might, for example, be selling sporting goods here 
in the United States.
  I should note that this bill would not require the President to take 
action under IEEPA; it would only enhance his ability to do so.
  I believe that American consumers ought to know whether the products 
they are buying, including things like toys, sweaters, and porcelain 
they might purchase for the upcoming holidays, are supporting the 
People's Liberation Army and the kind of activities I have identified.
  This legislation will help do that. It is needed both to shed light 
on the PLA's activities in the United States and to ensure that the 
President has the latitude he needs to take appropriate actions when 
evidence of wrongdoing arises. I hope my colleagues will support this 
legislation.
  Madam Speaker, I reserve the balance of my time.
  Mr. HAMILTON. Madam Speaker, I yield myself such time as I may 
consume. I rise in opposition to the bill.
  Madam Speaker, the purpose of the bill is to increase, I think, the 
likelihood that United States sanctions against companies owned by the 
Chinese military will be applied. The bill's findings make a number of 
assertions about objectionable conduct by the People's Liberation Army. 
I think there is broad agreement with regard to the accuracy of those 
assertions.
  The findings also describe a number of Chinese military commercial 
activities that are contrary to United States interests, or at least 
said to be contrary to United States interests, or in violation of 
Chinese Government commitments. The bill requires the Secretary of 
Defense to maintain a list of Chinese military companies operating in 
the United States, and it authorizes but it does not require the 
President to impose the sanctions provided for under the International 
Emergency Economic Powers Act, the act we generally refer to by the 
name IEEPA, even if that statute's threat standard has not been met.
  I really oppose the bill for two reasons. First of all, the bill 
hands the President of the United States an extraordinary amount of 
authority. Currently the International Emergency Economic Powers Act, 
or IEEPA, authorizes the President to impose a wide array of sanctions 
in response to a foreign threat to the United States national security, 
foreign policy or economic interests. Presidents have used that 
authority frequently in the past. Under this bill, the President would 
be free to impose IEEPA sanctions on a Chinese military company without 
declaring a national emergency, or even determining that the company in 
question posed any threat to United States public safety or national 
security.
  In other words, the bill provides no clear standards for invoking 
IEEPA sanctions. The bill establishes no threat standard for triggering 
the sanctions. The bill offers no congressional guidance to the 
President concerning the conduct that would justify sanctions. So far 
as I am aware, no existing sanctions law, and we have a number of them 
on the books today, offers the President anywhere near this kind of 
open-ended authority to impose sanctions. And so the bill has important 
implications beyond United States-China relations. It sets a precedent, 
and some view perhaps an alarming precedent, with respect to 
the separation of powers; it represents an extraordinary giveaway by 
the Congress of congressional authority to the executive to set the 
parameters of U.S. foreign and trade policy. I am aware, of course, 
that my colleagues will not be much persuaded by this argument, but I 
do find myself increasingly concerned about this propensity on the part 
of Members of the Congress and this institution to transfer authority 
to the President of the United States, and in this case not to give him 
any guidelines, not to give him any guidance, not to put any restraint 
or restrictions on the manner in which he uses that power. I can almost 
assure that sometime in the future, we in this body will be objecting 
very strongly to the manner in which some President, a future 
President, will have exercised authority under this bill, and we will 
complain that he has abused authority when in fact he will not have 
abused authority because there are not any guidelines here. That is one 
objection that I have to the bill.

  A second objection is that I think the bill involves the danger that 
it poses to sensitive intelligence information. The requirement to 
publish a list of Chinese military companies operating directly or 
indirectly in the United States I am told can easily jeopardize 
sensitive sources. This requirement of disclosure could release 
classified information that should be protected, and that information 
could relate to sources and methods in the intelligence community. I do 
not think it is wise for us to take action that will only make it more 
difficult to collect vital intelligence on Chinese commercial interests 
in this country. I understand that the Chinese do a lot of things that 
we do not like, and I agree with much of what has been said with regard 
to their conduct, but I do not think we have looked at this legislation 
carefully enough, we have not explained why the President needs any new 
authority to protect public safety or national security from the 
Chinese military. He already has very extensive authority to do that. I 
do not think the sponsors of the bill have adequately explained why we 
should take a step that has fairly serious implications for the balance 
of constitutional powers, and I do not believe the sponsors of the bill 
have told us how they would reconcile the need to protect sensitive 
intelligence sources with the requirement for publishing a list of 
companies associated with the Chinese military.
  Madam Speaker, I do not see any overriding reason to pass this bill, 
although I certainly understand the concerns that the sponsors of the 
bill have about Chinese military enterprises operating in this country 
and in other areas of the world.

                              {time}  1600

  But because of the two reasons that I have stated, I do urge Members 
to oppose the bill. I might say that the administration likewise 
opposes the bill.
  Madam Speaker, I reserve the balance of my time.
  Mrs. FOWLER. Madam Speaker, I yield myself such time as I may 
consume.
  I just want to stress again that this bill does not require the 
President to do anything, it just gives him the flexibility to do so.
  Madam Speaker, I yield 4 minutes to the gentleman from New York [Mr. 
Gilman], the distinguished chairman of the Committee on International 
Relations.
  (Mr. GILMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. GILMAN. Madam Speaker, I thank the gentlewoman from Florida for 
yielding this time to me.
  Madam Speaker, I am pleased to rise in strong support of this 
measure, a bill introduced by the gentlewoman from Florida [Mrs. 
Fowler] that would deny normal commercial status to the Chinese 
People's Liberation Army, whose enterprises subsidize China's military 
spending, and who promote arms proliferation activities from Iran to 
the streets of San Francisco.
  This critically important legislation is needed to monitor and 
restrict the long arm of those commercial enterprises in Asia and in 
the United States whose activities have been directly implicated in the 
proliferation of weapons of mass destruction, in arms smuggling, 
economic espionage, use of forced labor, piracy of intellectual 
property and misappropriation of military-sensitive technology.

[[Page H10207]]

  Its provisions would require the U.S. Secretary of Defense, the 
Attorney General and our Directors of the Central Intelligence Agency 
and the Federal Bureau of Investigation to publish a list of Chinese 
military companies that are operating in the United States, and would 
authorize the President to monitor, to restrict, and seize the assets 
of those companies.
  As an original cosponsor of this measure, along with a number of my 
colleagues, including the distinguished chairman of the Committee on 
National Security, the gentleman from South Carolina [Mr. Spence], I 
would remind my colleagues that the Chinese People's Liberation Army is 
the main instrument of repression within China responsible for 
occupying Tibet since 1950, massacring hundreds of student 
demonstrators in Tiananmen Square in June of 1989, and running the 
Laogai slave labor camps.
  The PLA, assisted by its money-making commercial enterprises, is 
engaged in a massive military buildup with most of the increase in off-
budget items. Our arms control agency has estimated that its actual 
military spending in 1994 was more than nine times its announced 
budget.
  We can and must ensure that the commercial enterprises supporting 
this massive military buildup be subjected to close scrutiny by our 
intelligence and law enforcement agencies, and we urge the President to 
use his existing authorities to restrict or ban their activities in the 
United States to the extent they represent a national security threat 
to our interests.
  This measure provides the authority for the President to seize the 
assets of Chinese companies listed in section 2(a) of this bill. It 
does not mandate, does not require any such Presidential action, but it 
does serve to put teeth in this measure denying commercial status to 
these Chinese companies. If the President were to abuse his authorities 
under the IEEPA, we can always restrict or eliminate the authorities 
provided in section 2(b) of this act.
  We know that we have a problem with the Chinese military as a whole, 
but perhaps for foreign policy reasons the President will not want to 
declare an emergency. This measure will allow the President to act 
accordingly. If this is any giveaway of authority, it is strictly 
limited though to PLA companies.
  Accordingly, I urge our colleagues to support this measure.
  Mr. HAMILTON. Madam Speaker, I yield myself an additional minute.
  I just wanted to point out the process involved in this bill. I think 
there were no hearings in the committee with respect to it. I am not 
aware that there was any consultation between the committee and the 
administration and no effort to talk with the administration about how 
they viewed this bill or to adapt the language of the bill so that it 
would be satisfactory to the administration.
  I am not aware that the bill had any consideration in the committee, 
the House Committee on International Relations. This bill was not 
reported out by the committee, I do not believe. I think the bill came 
out under a waiver, if I am not mistaken.
  Now, I understand that there are times when steps have to be taken in 
a committee to bypass normal procedures, but I must say I do not 
understand why that had to occur here. This is an important matter. The 
administration does have something to say on it, but I am not aware of 
any process that involved them to any degree.
  Madam Speaker, I reserve the balance of my time.
  Mrs. FOWLER. Madam Speaker, I yield 4 minutes to the gentleman from 
South Carolina [Mr. Spence], the chairman of the Committee on National 
Security.
  (Mr. SPENCE asked and was given permission to revise and extend his 
remarks.)
  Mr. SPENCE. Madam Speaker, I thank the gentlewoman from Florida for 
sponsoring this initiative.
  Madam Speaker, the Communist Chinese People's Liberation Army 
directly controls a vast empire of commercial enterprises throughout 
the world. In addition, there is a parallel network of state-run 
defense industries under the supervision of the Commission of Science, 
Technology and Industry for National Defense. Such enterprises have 
been involved in the proliferation of weapons of mass destruction, arms 
smuggling, economic espionage, use of forced labor, piracy of 
intellectual property and misappropriation of military-sensitive 
technology.
  As state-owned enterprises, PLA enterprises frequently operate on 
noncommercial terms, conducting their affairs for such nonmarket 
reasons as military and prestige considerations and for advancing 
foreign policy concerns, and even when operating for commercial 
motives, PLA profits subsidize the military establishment with off-
budget financing. According to Karl Schoenberger, writing in Fortune 
magazine, off-budget military spending in 1997, including both profits 
from PLA enterprises and PLA arms sales, is conservatively estimated at 
$2 to $3 billion. Based on purchasing power parity, the Arms Control 
and Disarmament Agency, not known for exaggerating threats, estimated 
that 1994 Chinese military spending was nine times its announced 
budget.
  To Chinese military spending is added the problems of weapons 
acquisition; for instance, fire sales from cash-strapped Russia. The 
Chinese arms proliferation problem involves what China buys as well as 
what it sells; is captured by its efforts to acquire the Sovremenny-
class destroyers from Russia, which are equipped with SS-N-22 
supersonic antiship missiles. These Sunburn missiles were designed to 
evade defenses by hugging the surface of the ocean and then popping up 
to come straight down on the surface of ships. They are designed for 
destroying American aircraft carriers and Aegis cruisers, especially 
disturbing given our Navy's presence in the Taiwan Strait.
  Instead of representing a stabilizing force in a generational 
leadership transition in China, as some allege, that military 
establishment is China's chief enemy of freedom at home and abroad. The 
PLA is responsible for internal repression from Tibet's occupation to 
the Tiananmen Square massacre. It is responsible for external 
aggression from the seizure of Mischief Reef in the Spratley Islands to 
the firing of missiles to intimidate Taiwan.
  The Communist Chinese military does not deserve to be treated like 
the world's private companies. I urge my colleagues to support this 
very fine piece of legislation.
  Mr. HAMILTON. Madam Speaker, I reserve the balance of my time.
  Mrs. FOWLER. Madam Speaker, I yield 3 minutes to the gentleman from 
New York [Mr. Solomon], the chairman of the Committee on Rules.
  Mr. SOLOMON. Madam Speaker, I thank the gentlewoman from Florida for 
yielding this time to me, and first I want to commend her for her 
sponsorship of this very, very important legislation and her 
contribution on all of this legislation that has been before us for the 
last 2 days.
  Madam Speaker, again we have a bill before us that brings to light a 
very serious problem with Communist China that has often been lost in 
our previous debates on China. It is especially lost when listening to 
the rhetoric of those who argue for the status quo called engagement 
with China. As my colleagues know, that word, ``engagement,'' always 
gets this country of ours in trouble and always ends up with American 
soldiers in combat somewhere.
  The problem is that we do not have true engagement or free trade with 
this Communist government. There is a barrier between us and them, and 
the barrier is the massive omnipresent Communist Chinese Government's 
apparatus dominated by the People's Liberation Army.
  This is no ordinary army, Madam Speaker. No, it is also a vast 
commercial empire raking in profits of well over $2 billion a year, 
mostly financed by either low-interest or no-interest U.S. taxpayer 
dollars, 35 years in length, and sometimes with a 10-year waiver, a 10-
year grace period, that may never even get paid back, and yet they keep 
doing this, Madam Speaker. They have got their fingers in everything, 
let me assure my colleagues.
  Madam Speaker, half of the things people are wearing around here are 
probably made by firms either owned by or affiliated with the People's 
Liberation Army. See this shirt I am wearing here? Used to be made up 
in Troy, NY. Do my colleagues know where it is made now? It is made by 
the People's

[[Page H10208]]

Liberation Army in China, and all the people that I represent are now 
out of work. We used to have several thousand seamstresses and workers 
up in the Hudson Valley. Today we are lucky if we have 300 left.
  And what does the PLA do with these huge profits? Well, for starters 
it dutifully carries out the totalitarian repression of the Chinese 
people as ordered by the Communist Party. The PLA is the instrument of 
terror in China. It was the PLA that rolled the tanks in Tiananmen 
Square, killing a thousand people. It is the PLA that occupies Tibet.
  What else does it do, Madam Speaker? Well, for starters, they fired 
some missiles at Taiwan last year, and they are using their annual 
double-digit budget increases in their military to gobble up weapons at 
a breathtaking pace, SU-27 fighter jets, Kilo submarines like this 
destroyer right here purchased from the Russian Government, armed with 
a deadly anti-American SS-N-22 missile that is pictured here, that is 
someday going to be used against U.S. soldiers and sailors stationed 
over in the Taiwan Straits. Just name it, the PLA is buying it.
  And lastly, it is, of course, the PLA that is proliferating the 
endless list of deadly weapons and technology.
  I urge all of my colleagues to support this legislation. I commend 
the gentlewoman from Florida. It is a great piece of legislation.
  Mr. HAMILTON. Madam Speaker, I yield 3 minutes to the distinguished 
gentleman from Mississippi [Mr. Taylor].
  Mr. TAYLOR of Mississippi. Madam Speaker, there is an excellent new 
book on the market. It is called Dereliction of Duty, and it talks 
about what went on in the Lyndon Johnson administration, starting about 
January of 1964 when he was telling the people of America that he was 
not going to get our Nation involved in any war in Vietnam, and yet 
behind the scenes was taking every step to do so.

                              {time}  1615

  That is what happens when you mislead the American people. That is 
what happens when you tell the American people you are doing one thing 
and yet another is going on.
  That is what these six bills are about. I voted for them. They sound 
good; they feel good; they do absolutely nothing. This bill, I would 
say to the gentlewoman from Florida [Mrs. Fowler], and you are my 
friend, does absolutely nothing.
  We have had two opportunities now on this floor to do something. My 
friend, and I still call him my friend, although we quarrel on 
occasion, Mr. Solomon, points out that the People's Army got $2 billion 
in profits from goods they sold in America last year. The people of 
China, the nation of China, got $40 billion because of their incredible 
trade surplus with our Nation. On two occasions, I have tried to 
address that. On two occasions, you people chose not to.
  It is a dereliction of duty of this Congress to mislead the American 
people that we are somehow getting tough with the Chinese Communists 
when we are not. There is a dereliction of duty of this Congress to 
pass six bills, put out press releases, go up there, talk to the 
television, go out on the quad and talk to the reporters, say we are 
finally getting tough with the Communists, when we are not.
  The only way we are ever going to get the Chinese Communists' 
attention, to get them to quit forcing abortions, to get them to quit 
selling missiles to our enemies, to get them to quit putting American 
businesses out of business with slave-labor-made goods, is when we hit 
them in the pocketbook, and we will never hit them in the pocketbook as 
long as we give them most-favored-nation status, when they get 2 
percent tariffs on their products coming into America and yet we allow 
them to charge us anything they want when we sell our products there. 
And those tariffs can be from 30 to 40 percent, and those tariffs are 
the main reason why our Nation is at a $40 billion annual trade 
disadvantage with the Chinese.
  I say to the gentlewoman from Florida [Mrs. Fowler], I am going to 
vote for her bill. It sounds nice. But if you are really serious, if 
the gentleman from New York [Mr.  Solomon] is really serious about 
this, then let us address the trade inequity. Let us forget about the 
silly rules of the House. Let us forget about jurisdictions. For once, 
let us do what is right for America.
  Mrs. FOWLER. Madam Speaker, I yield 3 minutes to the gentleman from 
California [Mr. Rohrabacher].
  [Mr. ROHRABACHER. Madam Speaker, I find it unfortunate that my 
friend, the gentleman from Mississippi [Mr. Taylor], would speak to us 
in such a condescending manner.
  And I will just say this right off the bat. There have been people 
that have put a lot of time and effort into this issue of human rights 
and China. This Member in particular has spent years engaged in the 
issue of human rights in China. And for you to stand up here and act 
condescending to people who have worked so hard, like the gentlewoman 
from Florida [Mrs. Fowler] and the gentleman from California [Mr. Cox], 
who have worked and sweated and done their homework for months and even 
years to try to get legislation to this floor, when you, as a Member 
yourself, have not gone through the procedures necessary to work a 
piece of legislation, is a little bit too much.
  I would like to commend the gentlewoman from Florida [Mrs. Fowler] 
and commend the gentleman from California [Mr. Cox] in particular for 
the hard work they have put into this legislation. And it is not just a 
1-day thing with these people, it is not a 1-day thing with this 
Congressman. We have worked for years trying to come to grips with a 
challenge to the United States of America, and that challenge is 
something that the public has not been able to recognize because there 
are American businessmen over making profit of Communist dictatorship, 
a dictatorship run by a group of thugs that threatens our national 
security and threatens the well-being of the people of this country.
  We have got a package of bills before us today, and we have had to 
work to get them to the floor and work to perfect them, that will make 
a difference.
  For example, we are not just talking about the People's Liberation 
Army, we are insisting that all companies that are associated with the 
People's Liberation Army, that are fronts for the People's Liberation 
Army, that a list be made and that it be made public, and that the 
President be given the discretion, which, of course, our distinguished 
ranking member on the Committee on International Relations opposes, 
that the President be given the discretion to act against these 
companies.
  I am not afraid that the civil rights of these People's Liberation 
Army companies might get stepped upon. We are talking about the biggest 
abusers of human rights in the world, people who torture Christians, 
who put believers in God in prison, put them in forced labor camps, use 
them as slave labor to produce goods that will be sold, some of those 
goods, sold right here in the United States of America.
  We are trying to come to grips with this problem, we are trying to 
alert the American people to it, and I, for one, deeply appreciate the 
gentlewoman from Florida [Mrs. Fowler] and especially the gentleman 
from California ([Mr. Cox] and all the other people who put time and 
effort into this package.
  The People's Liberation Army is providing billions of dollars, 
billions of dollars, of revenue, by selling products to us, to do what? 
As the gentleman from New York [Mr.  Solomon] stated, to build up their 
armed forces in a way by selling products to us.
  What will they do with these weapons? This massive buildup that we 
see of the Chinese military, what will they do? Some day they may use 
those weapons to kill Americans.
  Well, we are taking steps today to see that we come to grips with 
this incredible challenge. I, for one, am proud of the gentleman from 
New York [Mr. Solomon], I am proud of the people involved in the 
effort.
  One last thing about this particular bill, H.R. 2647. No, it does not 
do everything, but it takes a long step forward. It will alert the 
American people to what companies are nothing more than fronts for the 
military arm of the Chinese Communist regime, and it gives the 
President authority to act if we find them stealing our technology or 
acting in a way that is totally inconsistent with the security needs of 
our country.

[[Page H10209]]

  So I rise in strong support of this legislation and commend my fellow 
colleagues who put so much time and effort into trying to do something 
about it. Lyndon Johnson certainly didn't do anything about it.
  [Mr. HAMILTON. Madam Speaker, I yield 7 minutes to the distinguished 
gentlewoman from California [Ms. Pelosi].
  Ms. PELOSI. Madam Speaker, I thank the distinguished ranking member 
for yielding me this time, and I commend the gentlewoman from Florida 
[Mrs. Fowler] for her leadership on this important issue.
  I just want to return to the dialog where the gentleman from 
California [Mr. Rohrabacher] started his remarks. I wanted to commend 
the gentleman from Mississippi [Mr. Taylor] though, too, for his 
comments, because it is true, we should be doing more. But this is the 
very least we should do, where we can come together and hopefully get 
some action on the Senate side and put these bills on the President's 
desk. This gives us a chance to demonstrate the need for this 
legislation and to make a statement of our national values and concerns 
in our relationship with China.
  As I have said over and over, I believe we will have a brilliant 
relationship with China, economically, diplomatically, culturally, 
politically, and every way, but that can only happen when the Chinese 
Government respects its own people, stops proliferating weapons of mass 
destruction to rogue states, and plays by the rule in our trade 
relationship.
  I believe we should have engagement with China, but it must be 
effective engagement, that makes the trade fairer, the world safer, and 
people freer, and not the destructive engagement that we have now that 
not only coddles dictators but extends unwarranted hospitality to them.
  For example, when President Clinton toasted President Jiang Zemin, he 
was toasting the leader of the Chinese military that at that very 
moment was brutally occupying Tibet, continuing its proliferation of 
weapons of mass destruction to rogue and unsafeguarded states, 
repressing dissent in China, and a military that had in the past year 
and a half threatened with missiles the election in Taiwan, a military 
that had exported illegally AK-47 type rifles into the United States, 
selling them at a very cheap price on the streets here, making them the 
weapons of choice for gangs, all of this in violation of our law, but 
we again looked the other way or pulled the plug on the investigation 
too soon.
  I want to call to my colleagues' attention a photograph that we have 
not had on the floor in a long time, because, frankly, I think it is 
too sacred to bring before this body, which has over and over again 
rejected our appeals for a change in U.S.-China policy because of 
repression in China and Tibet.
  But, Mr. Taylor, respecting and admiring your dissatisfaction with 
what is going on here too, because, frankly, I am dissatisfied too, it 
is a cluster of fig leafs that we are dealing with, but they have more 
to them than that. As one who has been critical of fig leaf approaches 
here, I do commend our colleagues for the thoughtful attention they 
have paid and the reasonable solutions they have come up with so they 
can get almost unanimous support in this body for these initiatives.
  But the gentleman is right. I had the bill on this floor that would 
limit MFN, revoke MFN for products made by the People's Liberation 
Army. That is what we should be doing here today. We do not have the 
votes for it, the President will not sign it, it would not pass in the 
Senate probably, and that, I think, is the least we can do.
  But I bring this photograph back today in hope that the gentleman 
from California [Mr. Cox] and the gentlewoman from Florida [Mrs. 
Fowler] and the gentleman from New York [Mr. Solomon] and so many 
others who have worked on this package, that we can be serious about 
what we are doing and this is not perfunctory.
  This is the photograph of the lone man before the tank. We all 
identified with him and admired him, and we immediately forgot the 
cause that he was standing there for. But I bring it here today in 
discussion of the People's Liberation Army, because this is the 
People's Liberation Army. They rolled out the tanks against their own 
people in the streets of Beijing on June 3 and 4 of 1989.
  Fast forwarding to the present, this is the same People's Liberation 
Army that, according to the Office of Naval Intelligence in a March 
1997 report, an unclassified report, stated that discoveries after the 
Gulf War clearly indicate that Iraq maintained an aggressive weapons of 
mass destruction procurement program. A similar situation exists today 
in Iran with a steady flow of materials and technologies from China to 
Iran. This exchange is one of the most active weapons of mass 
destruction programs in the Third World and is taking place in a region 
of great strategic interest to the United States. It is in our 
strategic interest to stop the proliferation by the Chinese military, 
the People's Liberation Army, of these weapons of mass destruction to 
Iran.
  Between June of 1989, and we can go back further than that, but just 
taking from then to the present, and now, the Chinese military has been 
engaged in the activities that many of us have described relating to 
Taiwan, Tibet, China itself, proliferation, et cetera.
  They are the guardians of China's repressive dictatorial regime. They 
and the People's Armed Police, which are part of the military, stand 
guard atop the watch towers of the laogai, the Chinese gulag, and are 
executioners of prisoners, some of them for harvest of their organs for 
profit.
  The People's Liberation Army acts with swift brutality, as evidenced 
in Tiananmen Square as we see here, to crush any attempt to introduce 
democracy or promote basic human rights in China.
  Indeed, when President Jiang, the leader of that military, who got a 
21-gun salute from our administration by the military of this 
repressive regime, when he was here, he rejected the notion of economic 
reform leading to political reform and stated that political conformity 
and economic reform are complementary to each other. I was trying to 
get his exact words. He rejected the notion of people's evolution, and 
yet this administration and many in this body continue to say that that 
is what is happening in China.
  Recently, huge worker demonstrations in Sichuan Province were 
brutally repressed by the People's Armed Police. Workers, believers, 
intellectuals, and students are rounded up and confined to reeducation 
camps in a continuing attempt by the Chinese authorities to break their 
spirit and prevent the establishment of independent organizations.
  But this is why the legislation of the gentlewoman from Florida [Mrs. 
Fowler] is so necessary. Chinese military-owned companies are selling 
huge amounts of goods in the United States, including toys, exercise 
weights, camping tents, and fish for fast food restaurants. Among 
American companies that buy products from wholesalers or distributors 
who get goods from them, I will invite my colleagues to read the 
People's Liberation Army, where to find PLA companies in the United 
States, what products they sell, and who are the PLA's customers.
  I think my colleagues would find this very informational and a 
compelling reason to support the legislation of the gentlewoman from 
Florida [Mrs. Fowler]. I thank the gentlewoman for presenting it.

                              {time}  1630

  Mrs. FOWLER. Madam Speaker, I thank the gentlewoman from California 
[Ms. Pelosi] for her support and her diligent work in this effort.
  I yield 5 minutes to the gentleman from California [Mr. Cox], the 
chairman of the Republican Policy Committee.
  Mr. COX of California. Madam Speaker, I thank the author of this 
bill, the gentlewoman from Florida [Mrs. Fowler], for her courage in 
bringing it to the floor, and for her hard work and making sure that 90 
days from its passage, the Department of Defense, the CIA, the FBI and 
the Department of Justice will combine their resources to produce a 
list of People's Liberation Army fronts doing business in the United 
States.
  The reason we are here is because we love the peoples of China, and 
we know the difference between the Communist government in Beijing and 
the people. We know that the people are not the

[[Page H10210]]

regime. We also know that free enterprise is not communism and 
communism is not free enterprise, and we know that the People's 
Liberation Army, the largest standing military on Earth, is not a 
commercial enterprise. And those of us who are for free trade 
understand that free trade must take place between commercial actors, 
market forces, driven by a profit motive, and competition is what makes 
markets work.
  The People's Liberation Army is not interested in that. The People's 
Liberation Army has very different aims, and we understand what armies 
are all about.
  The money that is generated from the subsidized industries in which 
the People's Liberation Army is engaged as so-called profits provide 
off-budget financing for the People's Liberation Army to expand even 
more than it already has. In nominal terms, that is what they report, 
the People's Liberation Army has doubled its spending since the 
collapse of the Soviet empire. They have literally moved to fill the 
void created by the collapse of the Soviet Union militarily. But the 
Arms Control and Disarmament Agency tells us that that is understated 
by a factor of probably 8 times. The People's Liberation Army is 
enormous, but it is also growing, and it is growing because of these 
rather unique and creative financial arrangements.
  A good example of these financial arrangements is Poly Technologies, 
about which we have heard some in the course of this debate. Poly 
Technologies, Inc., which is engaged in everything from the sale of 
small arms to the latest weapons of mass destruction in the People's 
Liberation Army arsenal has as its chairman a PLA officer. Bao Ping is 
none other than Deng Xiaoping's son-in-law.
  This People's Liberation Army organization, using, for example, $2.5 
billion that it earned in a single Middle East arms transaction, those 
were its net profits in that one deal, occupies almost one full city 
block near Beijing's Forbidden City. Poly Plaza comprises two large 
gleaming white marble towers connected by a 4-story high exhibition 
hall and theater. Across the face of the building in gold letters in 
English and Chinese characters, it says, Poly Plaza. They own property 
all over the People's Republic of China. Luxury villas in Beijing and a 
large piece of the Shanghai Securities Exchange building.
  They also have commercial interests in California, where they were 
arrested for trying to smuggle into our country 300,000 machine guns 
for sale to street gangs. This is the indictment. They happen to be 
caught because there was an FBI sting operation, and in fact, a PLA 
agent offered to sell the FBI officers engaged in the sting operation 
Red Parakeet missiles, like Stinger missiles, the Chinese call theirs 
Red Parakeets, which he boasted, and it is written out here in the 
indictment, could take a 747 out of the sky. That is the kind of 
enterprise that the People's Liberation Army conducts.
  Fortune Magazine, as has been alluded to earlier in the debate, 
reports that profits from People's Liberation Army's so-called 
commercial enterprise, the PLA fronts, yield about $2 billion to $3 
billion in hard currency off-budget financing for the People's 
Liberation Army. The People's Liberation Army, more than anything, is 
the instrument of internal repression in the People's Republic of 
China. We ought not to pretend that when they are using their 
commercial fronts to do business in the United States that it looks 
anything like free trade. It is not.
  What this bill does is very modest. It will produce a list and it 
will produce it in relatively short order so that we can then know who 
we are dealing with. That kind of information the American people need; 
that kind of information this bill will provide, and I congratulate the 
gentlewoman from Florida.
  Mrs. FOWLER. Madam Speaker, I yield 30 seconds to the gentlewoman 
from California [Ms. Pelosi].
  Ms. PELOSI. Madam Speaker, I thank the gentlewoman for yielding once 
again and commend her for her leadership.
  I wanted to join the gentleman from California [Mr. Cox], and I did 
not have enough time to finish when I was enumerating all the kinds of 
products that the Chinese People's Liberation Army sells in the United 
States.
  The point is that the point that the gentleman from California [Mr. 
Cox] made, and that is that this subsidizes the Chinese military 
apparatus, the same one that brutally occupies Tibet, sells weapons of 
mass destruction into the Third World. The toys you buy in the United 
States from Poly Technologies and the rest subsidize the Chinese 
military.
  Mr. HAMILTON. Madam Speaker, I yield 3 minutes to the distinguished 
gentleman from Mississippi [Mr. Taylor].
  Mr. TAYLOR of Mississippi. Madam Speaker, let me begin by agreeing 
with everything the gentleman from California [Mr. Cox] just said. All 
of those things really did happen. The company that shipped that 
container-load of AK-47's into our country is the Chinese Ocean 
Shipping Co. We on the Committee on National Security this year passed 
an amendment which would ban that company, or any state-owned shipping 
company, from leasing or operating an American port that used to be a 
military installation that has reverted back to a local community. 
Unfortunately, the Senators chose not to do so, and it was dropped out 
of the conference committee report.
  I want to go back to some things that were said earlier, that this 
bill is great because we authorize the President to do some things. One 
of the things we are as Members of Congress expected to do is read the 
Constitution of the United States, and any Member who reads the 
Constitution of the United States knows that in section 1 it talks 
about the powers of the Members of Congress. One of those powers will 
be debated twice today, because it involves Article I, section 8, 
clause 3 of the Constitution, which clearly gives Congress, and I am 
quoting, ``the power to regulate commerce with foreign nations.''
  What the gentlewoman from Florida [Mrs. Fowler] is trying to do here 
is to regulate commerce with foreign nations, and I have no problem 
with that because she is trying to slap the Chinese for their wrongful 
deeds. The problem with it is we should be doing it and we should not 
be delegating our constitutionally mandated authority to the President.
  We know they have done bad things. We know that they have tried to 
smuggle a container, a 40-foot container load of AK-47's into this 
country to sell to street gangs in this country and cause harm in this 
country. Let us not pretend that that is not going on. And let us not 
pretend that these measures that have absolutely no force at all are 
going to do anything about it.
  I am going to say for the last time, if this Congress is serious 
about getting the Chinese' attention for their wrongful deeds, we have 
to hit them in the pocketbook. They have unlimited access to the 
American market in most favored nation status which a majority of 
Members in this body, but not me, voted for, which allows them to have 
market access for 2 percent. They charge American goods anywhere up to 
40 percent.
  We have had two separate options, two separate opportunities to level 
the playing field. The sponsor of this bill did not vote to do so. I 
hope this Congress in the next session will address that. Because if we 
really think that the Chinese are doing wrong things and we really want 
to address it, there is a means to do so. It is called trade fairness. 
It is called basic fairness for the American working people.
  I hope just once the Committee on Ways and Means will allow the 
Members of this body to vote on something that will call for fairness 
in trade between ourselves and the People's Republic of China.

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